More Can Be Done to Help Individuals Plan for Retirement

A survey suggests there are some trust issues to overcome between individuals and financial institutions or advisers.

Individuals with a formal plan for retirement savings and income were more than twice as likely to say they feel secure about their retirement as those without one, according to a survey from Deloitte Center for Financial Services.

One in five respondents said they don’t have a plan for retirement because they haven’t taken the time to meet with a financial professional. Three in 10 said they intend to put a plan together, but haven’t set aside the time to do so.

Fewer than one-third (29%) of consumers in the current survey felt that financial institutions in general were highly trustworthy, while only one-third of respondents felt that way about financial professionals overall. But that response was different when it came to assessing their own financial adviser, with 78% of respondents saying that they trusted them, compared with 68% in 2012.

Consumers’ sentiments almost matched the perception of financial professionals themselves: Nearly three-quarters (74%) of surveyed financial advisers felt the level of trust with their own clients has gone up. Likewise, more than four in five (82%) of surveyed advisers also believed that their clients have a great deal of trust in them to “act in their best interests.”

However, there are trust issues to overcome. For example, only about half (52%) of the advisers surveyed feel that their clients trust the products they offer to help meet their retirement goals.

"If the financial industry wants better results for clients, they should make retirement advice and planning a top priority and deliver planning offerings that are focused on the needs and desired outcomes of the client," says Sean Cunniff, senior manager with Deloitte Services LP and investment management research leader for the Deloitte Center for Financial Services. "Advice and retirement planning programs can supplement the educational programs, build product awareness, help clients set their financial priorities, and provide a path to transition clients from 'do-it-yourselfers' to advice-seekers."

The survey reveals the workplace is emerging as a potentially fruitful venue for engaging individuals in broader retirement planning, with surveyed consumers ranking workplace retirement plans as the second-most trusted source for financial information, ahead of an individual's primary financial institution and behind only his or her primary financial adviser.

Forty-five percent of respondents feel "very secure" in having enough savings and income to maintain a comfortable retirement lifestyle. Yet, of those consumers surveyed who felt very secure about retirement, 17% did not have either a financial adviser or a plan for retirement.

The percentage who feel “very secure” about retirement marks a sizable jump from 28% in Deloitte's initial survey in 2012, but the survey report's authors say this positive increase could be a direct result of strong recent growth in investment returns, and they are concerned this sentiment may be "fleeting." It could be reversed by a downward shift in the economy or rising interest rates, which could influence stock market volatility.

The majority (55%) of those surveyed still do not feel financially set for their senior years despite improved economic conditions.

The Deloitte Center for Financial Services commissioned Andrews Research Associates to conduct an online survey of 2,000 U.S. consumers in September 2014, focusing on the factors impacting respondents' feelings of security around retirement finances. The consumer data was supplemented with in-depth telephone interviews with 178 financial advisers. The survey report is here.